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the New Economy Ticker
The latest news, debates, proposals and developments on new economic thinking at a glance.
What Super Tuesday tells us about the economy of the mind – Article
Rana Foroohar, Financial Times, 4.03.2024
Feelings, not facts will drive the results of the upcoming US primaries.
Many Americans Believe the Economy is Rigged – Article
Katherine J. Cramer & Jonathan D. Cohen, New York Times, 21.02.2024
If there is a singular explanation for dissatisfaction with the economy, it is a lack of financial certainty.
There is nothing to gloss over: The economic situation is dire – Interview (German)
Interview with Jens Suedekum, WirtschaftsWoche, 1.03.2024
Germany is suffering as a business location and the industry is sounding the alarm. Top economist Jens Südekum warns that the country is facing “huge economic and fiscal policy challenges”.
The days of the debt brake are numbered – Article (German)
Mark Schieritz, Die Zeit, 6.03.2024
Despite all the differences, even the CDU and FDP are ultimately in favour of reforming the budget rules. The only question is how much damage will be done before that happens.
The Case for a European Public-Goods Fund – Article
Age Bakker, Roel Beetsma & Marco Buti, Project Syndicate, 4.03.2024
In a forthcoming paper, the authors propose the creation of a 750 billion dollar EU public goods fund to bridge funding gaps between key areas such as renewable energy and digital infrastructure.
How do we get out of the crisis? – Debate (German, Paywall)
Mark Schieritz & Kolja Rudzio, die ZEIT, 28.02.24
To get the economy moving again, the state should subsidise individual industries, says Robert Habeck’s advisor Simon Jäger. No, the state already distributes far too many subsidies, counters Christian Lindner’s advisor Lars Feld.
Rhine open to talks on debt brake – Article (German)
Süddeutsche Zeitung, 29.02.24
Hesse’s Minister President Boris Rhein (CDU) is open to a discussion about the debt brake.
An Antidote to the Polarization Poison – Article
Ngaire Woods, Project Syndicate, 26.02.24
Political sectarianism, focused on demonizing supporters of opposing parties, is growing increasingly common in the world’s democracies. To reverse this dangerous trend, policymakers should promote sustainable and equitable economic growth, maintain shared public spaces, and prevent information silos.
Has the European Recovery and Resilience Facility fulfilled its promise? – Article (German)
Lukas Betram & Lydia Korinek, Makronom, 26.02.24
Three years have passed since the launch of the European Recovery and Resilience Facility. It has been quite successful in the immediate crisis response. However, further steps are needed to build long-term resilience.
Explaining Americans’ Pessimism About a Strong Economy – Article
Jeffrey Frankel, Project Syndicate, 22.02.24
At least six reasons have been advanced to explain the apparent disconnect between US economic indicators and public-opinion surveys. While some are clearly wrong, others – in particular, the idea that perceptions are simply lagging behind reality – are convincing.
Inheritance tax as a litmus test for liberals – Article (German)
Mario Dübel, der Standard, 26.02.24
In the past, major liberals in particular made radical demands in order to realise the promise of a society based on individual achievement.
The strange lack of electoral reward for the success of Bidenomics – Column (Paywall)
Martin Sandbu, Financial Times, 22.02.24
Why is it not the economy, stupid?
According to the recently published Minimum Wage Report 2024 by the Institute of Economic and Social Research (WSI), there was a significant increase in the minimum wage in most EU countries at the beginning of 2024. The European Minimum Wage Directive adopted in autumn 2022 is cited as a favourable factor. However, Germany is an outlier in this development: the small increase in the minimum wage is lagging behind the price trend.
Most EU countries saw significant increases in minimum wages on 1 January 2024. Despite persistently high inflation rates in the majority of member states, these were sufficient to maintain or even increase the purchasing power of the minimum wage. The minimum wage momentum was also boosted by the European Minimum Wage Directive adopted in autumn 2022. In the course of implementing the EU directive, many member states are endeavouring to achieve the reference values of 60% of the median wage or 50% of the average wage set out in the directive. The development in Germany was different: here, the Minimum Wage Commission argued against the votes of the trade unions in favour of only a small increase in the minimum wage, which falls behind the price trend.
Read the full report (in German) here.
Europe must ask: what if Biden wins in November? – Article (Paywall)
Rana Foroohar, Financial Times, 19.02.24
Traditional allies of the US are pondering a response to Trump 2.0 but they need a plan for a Democratic election victory as well.
America’s economy is thriving like never before – Article (German, Paywall)
Winand von Petersdorff, FAZ, 16.02.24
President Joe Biden’s economic policy has been loudly criticised. Many economists are now surprised by the particularly strong growth of the American economy. They had predicted a deep recession.
Data check debunks “myth of the bloated German state” – Inconspicuous development in international and historical comparison – Press release (German)
IMK Pressemitteilung, 15.02.2024
Contrary to what is sometimes claimed, government and social spending in Germany is not particularly high either in an international or historical comparison – and has by no means grown strongly recently. This is shown by a new data analysis by the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation.
AI Could Actually Help Rebuild The Middle Class – Blogpost
David Autor, NOEMA, 12.02.24
AI doesn’t have to be a job destroyer. It offers us the opportunity to extend expertise to a larger set of workers.
“The firewall still holds in the West”: political scientist Colin Crouch on right-wing extremism – Interview (German)
Michel Hesse, Frankfurter Rundschau, 12.02.2024
Conservatism is in crisis. Political scientist Colin Crouch analyses right-wing extremism and populism in Europe – and the right remedies.
What Was Capitalism? – Article
James Livingston, Project Syndicate, 16.02.24
The economic crisis of 2008-09 and the pandemic of 2020-21 delivered devastating blows to a market society that was already staggering – hollowed out by the “financialization” or “dematerialization” of assets. And those perched at the commanding heights of today’s economy seem no less hollow.
Does saving make people right-wing? And why? – Blogpost (German)
Stephan Kaufmann, Politische Ökonomie, 10.02.24
Studies show that austerity goes hand in hand with the rise of right-wing parties. Stephan Kaufmann provides an overview of the studies and analyses the way in which the causes of the right-wing trend are researched. The political path to the right is not that far, he writes.
Donald Trump has 11-point polling lead over Joe Biden on handling of economy – Article (Paywall)
Lauren Fedor & Eva Xiao, Financial Times, 11.02.24
FT-Michigan Ross survey shows US voters are not crediting president even as their finances improve.
What if it’s not the economy, stupid? – Article (Paywall)
Rana Foroohar, Financial Times, 05.02.24
With Biden’s supply-side economic policies working, November’s presidential election may well be waged on social issues.
Dani Rodrik: doing industrial policy right – Interview (Paywall)
Robert Armstrong & Ethan Wu, Financial Times, 09.02.24
The Harvard economist on ‘the new economics of industrial policy’, China’s subsidies and Joe Biden’s record.
Populism’s Great Replacement of Economics – Article
Antara Haldar, Project Syndicate, 01.02.24
Dozens of countries will hold national elections in 2024, in what many view as a kind of plebiscite on the postwar global order. The likely rejection of that order in favor of populist leaders should serve as a wake-up call for policymakers to heed the message that no economy exists outside the society that created and sustains it.
Trade liberalisation can weaken unions and reduce votes for the left – Article
Pedro Ogeda, Emanuel Ornelas, Rodrigo R. Soares, CEPR Blog, 04.02.24
Intuitively, trade liberalisation should increase the appeal of left-wing parties that offer to protect workers with protectionist policies. This column uses evidence from Brazil to show how liberalisation actually reduced votes for the left by undermining labour unions, the traditional support base of many left-wing parties. These changes in voting behaviour have proven persistent and highlight the institutional channels through which economic policy may have repercussions for the political landscape.
If shadow banking looks like a duck . . . – Opinion Piece (Paywall)
Leah Downey, Financial Times, 05.02.24
Maybe it should be regulated like one? As private credit proliferates, we must think more seriously about its risks.
OUR MAIN TOPICS
New Paradigm
NEW PARADIGM
After decades of overly naive market belief, we urgently need new answers to the great challenges of our time. More so, we need a whole new paradigm to guide us. We collect everything about the people and the community who are dealing with the question of a new paradigm and who analyze the historical and present impact of paradigms and narratives – whether in new contributions, performances, books and events.
Redefining
the role of
the state
REDEFINING
THE ROLE OF
THE STATE
For decades, there was a consensus that reducing the role of the state and cutting public debt would generate wealth. This contributed to a chronic underinvestment in education and public infrastructure. New research focuses on establishing when and how governments need to intervene to better contribute to long-term prosperity and to stabilize rather than aggravate economic fluctuations.
Remaking
finance
REMAKING
FINANCE
More than a decade after the financial crisis there still seems to be something seriously wrong with the financial system. Financial markets still tend to periodically misprice risk and contribute to boom and bust cycles. A better financial system needs to discourage short-termism and speculative activity, curtail systemic risk and distribute wealth more broadly.
Greening
prosperity
GREENING
PROSPERITY
During the high point of market orthodoxy, economists argued that the most 'efficient' way to combat climate change was to simply let markets determine the price of carbon emissions. Today, there is a growing consensus that prices need to be regulated and that a carbon price on its own might not be enough.
Reducing
inequality
REDUCING
INEQUALITY
The rising gap between rich and poor has become a threat to social cohesion in most rich countries. To reverse this trend it will be crucial to better understand the importance of different drivers of income and wealth inequality.
Innovation Lab
INNOVATION LAB
Do we need a whole new understanding of economic growth? What would be a real alternative? How viable are alternatives to GDP when it comes to measuring prosperity? These and other more fundamental challenges are what this section is about.
Globalization
for all
GLOBALIZATION
FOR ALL
After three decades of poorly managed integration, globalization is threatened by social discontent and the rise of populist forces. A new paradigm will need better ways not only to compensate the groups that have lost, but to distribute the gains more broadly from the start.
Europe
beyond markets
EUROPE
BEYOND MARKETS
The euro was planned during a period in which economic policy making was driven by a deep belief in market liberalism and the near impossibility of systemic financial crises. This belief has been brought into question since the euro crisis, which showed that panics do happen. New thinking needs to focus on developing mechanisms to protect eurozone countries from such panics and to foster economic convergence between members.
Corona Crisis
CORONA CRISIS
The current Corona crisis is probably the worst economic crisis of the post-World War 2 era. Economists are working hard on mitigating the economic effects caused by COVID-19 to prevent a second Great Depression, the break-up of the Eurozone and the end of globalisation. We collect the most important contributions.